velocity banking strategy | The Kwak Brothers

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Pay Off Your Loan Or Invest? Know What’s Better For You

Time and time again, I see people choosing to focus either a mortgage or an investment but not both at the same time. But which option is better to start with? In this article, I will show you how you can invest AND pay off your mortgage without the diminishing effects of either process. I want to show you that it’s possible to pay off your mortgage and invest simultaneously. More often than not, such a decision often depends on your financial situation. While many people believe that paying off money is best since it saves on your interest payments, others may want to invest their extra

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September 1, 2020

Velocity Banking vs Sending In Extra Payment | Which Is Better?

Velocity Banking vs Sending in Extra Payment… Which is Better? What does the math say? and How? In this video, we’re going to break down the difference between Velocity Banking Vs Sending In Extra Payment. We’ll talk about how both can save money but we’ll see which one comes out on the top in terms of saving MORE money and time in terms of interest. So let’s do the comparison, Velocity Banking vs. Sending in Extra Payment… Which is Better? Enjoy! FREE Velocity Banking Calculator: https://acceleratedbanking.com Okay, so let’s get to the bottom of Velocity Banking vs Sending In Extra Payment comparison. Which is better… The Velocity Banking Strategy? or simply doing extra payments into the mortgage principal. Well, we can tell you that both can possibly save you some money and time. The velocity banking strategy has many names. We call it “Accelerated Banking” but some people call it the heloc method, heloc strategy, heloc to pay off your mortgage, debt acceleration, mortgage acceleration, or pill method. Let’s dive into how the strategy works… velocity banking strategy explained. The way that the Velocity Banking Strategy works is that we’re changing how our interest is first being calculated. The first main difference between a traditional mortgage and a HELOC is that a HELOC uses simple interest (average daily interest) and a mortgage uses amortized interest (interest accrued based on monthly balance). That’s the first difference when we’re looking at velocity banking vs sending in extra payment. The next big difference is that we’re sending in ALL of our income and savings into the HELOC to lower the average daily balance. Which ultimately means that we’re paying less of interest since the principal balance is lowered. On the flipside, sending in extra payment only causes us to save money by what we actually send in… not by the full income amount. That’s the next big difference when it comes to comparing velocity banking vs. sending in extra payment. A HELOC also allows us to draw the money whenever we want in a matter of seconds. Whereas with a traditional mortgage, we’re unable to do so. This is why we can send in all of our income into the HELOC and still be able to use the HELOC to pay for our expenses and accidentals. That’s HUGE when it comes to the difference between sending in extra payment vs velocity banking. Also with a HELOC, you can almost treat it like a savings account where by parking your excess cash can save you 3-6% interest on the HELOC vs. trying to earn money on a savings account that may pay out 0.5 ~ 1.5% APY. (this is really low). So those are some of the comparisons when it comes to velocity banking vs sending in extra payment. When done right, velocity banking can help you save more money and time when paying off your mortgage faster.
June 29, 2020

Velocity Banking: HELOC to Pay off Your Mortgage FASTER (Step-By-Step)

Velocity Bank! Does it ACTUALLY help you pay off your mortgage faster using a HELOC? Can you use a HELOC to pay off your mortgage? In this video, we’re going to explain the Velocity Banking Strategy Step by Step. We’ll illustrate how does the Velocity Banking concept work, how it ACTUALLY saves you money and time, and at the end of the video, I’ll leave you with a FREE Velocity Banking Calculator to download: FREE VELOCITY BANKING HELOC CALCULATOR: http://chopmymortgage.com So how does the Velocity Banking Strategy actually works? Here in the Kwak Brothers, we call it the Accelerated Banking Strategy. To start off, this strategy does rely on having a line of credit – like a Home Equity Line of Credit (HELOC) This strategy WILL work with a 1st lien HELOC, 2nd lien HELOC, Personal Line of Credit (PLOC), and even some cases – credit cards. A HELOC has features that mortgages don’t and the BIG feature is the “Open-Ended” feature. So here’s the “traditional” version of the velocity banking strategy: (2nd Lien HELOC Version) You take a chunk of a HELOC and do a principal payment against the mortgage. Essentially, you did a balance transfer from the mortgage to the HELOC. From there, you’re going to put ALL of your income and savings into the HELOC. Remember, you can ALWAYS draw the money back out from the HELOC anytime you want. Think of the HELOC as your new savings account. This effect allows for the average daily balance to go down – thus you pay less interest. With the money you DIDN’T pay for interest – now goes to principal which pays down the HELOC faster than the mortgage. The next version of the Velocity Banking Strategy is using a 1st lien HELOC instead. With this version of the Velocity Banking strategy, you’re completely replacing your mortgage with a 1st lien HELOC. Once you replace your mortgage with a HELOC, you do a similar pattern with the 2nd lien HELOC Velocity Banking. You’ll dump all of your income into the HELOC to lower the average daily balance. Here’s a bit of a bonus tip that I DON’T regularly share on YouTube… I only share this with my students and coaching clients… You can also use a credit card to hold all expenses and operating expenses for 30 days while your income stays parked in the HELOC. This allows for the HELOC balance to stay low for a long time which means you’ll end up paying less interest. After the 30 day period, you’ll use the HELOC to completely pay off the credit card so that you don’t end up paying any interest on the credit.